why investment firms are fleeing to the farm with cash in hand. in today's cover story, cyprus says no. after rejecting a bailout package, the next step for the mediterannean island. plus, "fuggetabout" the added expense. why more americans are paying the price to live large in the big apple. and, ways retailers are taking it up a notch. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, march 20th. i'm angela miles. in today's first look: a market madness rebound: stocks reversed course tuesday to end with a mixed session. the late lift to the market followed word that cyprus lawmakers voted down a bailout plan that would

have taxed people's money in the bank. gold continues its climb, while oil had a major sell off. the lead engineer at adobe is reportedly leaving for a job at apple. the software company's stock traded in heavy volume after the close on better-than- expected earnings. meanwhile, williams sonoma reports were up 9% in the latest quarter. larry shover of sfg alternatives joins us for a closer look at the trading day. good to have you on the show as always larry. yesterday, the market had a bit of a turnaround. there was a rebound into the close as news was coming in from cyprus. what do you make of that? > > i make of it that i don't think we are making that big of a deal with cyprus. as long as the sovereign debt markets have access to sovereign debt, to the banking system, something like cyprus, although it is a

headline risk, it is not a macro risk that we're used to. also, we had a really good housing number yesterday, confirming that our housing recovery is indeed on its way. > we also are ahead of the fed. i know traders will be closely watching for that statement. do you expect there will be any major changes there, larry? > > i don't expect any changes. we have heard a lot and seen a lot of bernanke lately, and today he has three chances to say something. however, i do think we are going to be looking for detail on what is more important to the fed: an expanding balance sheet, or withdrawing or withholding too early? > and i think we would be remiss if we didn't note that the president will be travelling to israel. what will the markets expect from that trip, if anything at all? > > i don't think the market's really building in any sort of expectations given the amount of numbers, the fomc, cyprus going on, really, it just seems not to be a game-changer at this point. > thank you very much. that is larry shover of sfg alternatives. herding cats may be easier than

predicting the outcome of what is repeatedly called "a fluid situation," otherwise known as "cyprus." our cover story explores some of the options left after that country's parliment on tuesday rejected a bailout deal that many say would've been no deal to a lot of average citizens there. cyprus' parliment rejected a european bailout that would've been paid for by taxing ordinary citizens' bank accounts. what now? cyprus' parliment could vote again; europe could restructure the deal, giving cyprus more flexible terms; or cyprus could ask russia for cash in exchange for russian access to the mediterranean island's gas reserves. "i think this is telling us something. it's telling us that germany is out of patience and isn't going to be bailing out any more countries at this time." until now, russia hasn't been an option widely considered by europe's other countries in financial trouble. but cyprus' finance minister headed there tuesday for talks. already, russia loans billions of dollars to companies on cyprus. russians, who like the tax haven cyprus provides, account for up to half of all bank

accounts there - the black market reportedly making up an undisclosed amount. "this is going to turn into a showdown of who blinks first. it's a corrupt banking system. how do you pay out 5% when you have interest rates near zero?" so far, europe's finance ministers' reaction to the rejected bailout has been regret. germany's said cyprus' business model doesn't work. austria's says bankruptcy would be a bigger catastrophe than the tax on savings, and luxembourg's called for a special euro-group meeting. only greece said it supports cyprus' choices. so far, the european central bank says it will provide liquidity to cyprus as needed. banks in cyprus will remain closed until next tuesday, the 26th. back in the u.s., sequester protesters will rally today

across the nation. at noon in dc, demonstrators from the american israel public affairs committee converge on capitol hill. elsewhere, members of various unions will demonstrate. the national day of protest is in response to the $85 billion in severe budget cuts taking place. those cuts include programs such as head start and a massive slash to military spending. goldman sachs analysts predict lawmakers will at least vote to avert a government shutdown. when it comes to infrastructure, america gets a d+. the american society of civil engineers gives the nation low marks, warning roads, dams, waste systems and especially levees are all in need of massive upgrades. it's predicted the u.s. will need to spend $3.6 trillion on upgrades by 2020. currently, federal funding has only allotted $1.6 trillion. perpetually crowded new york city is getting even more so. for the first time since 1950, more people are moving into the

city than leaving it. its population is now estimated at more than 8 million people, an all-time high. it's a trend that new york real estate pro anthony lolli says could be a buy signal for home shoppers. "the question you want to ask yourself is, is a property going to be worth more money in two years? and the answer to that is 'yes,' so it is a good time to buy." all five of the city's boroughs have increased in population. the gettin's good if you're a farmer selling your land. farmland prices are soaring to record levels. in nebraska, the price for irrigated land has doubled since 2009. it's nearly the same story in iowa, where an acre of land averages nearly $8,300. jack scoville says it's the result of high crop prices: "ag prices are going higher longer-term because we have more mouths to feed and less land. so we have to be more efficient with the land we have." a study by iowa state university says investor group interest in iowa farmland is

beginning to wane. that may coincide with what some forecasters predict may be an off year for the price of corn, but a huge crop expected to be planted. starbucks is buying land to farm its own coffee beans. the company just bought a farm in costa rica. it could give starbucks an edge by being able to control costs that come with growing beans plus test new coffee varieties. the coffee chain aims to have all of its coffee ethically sourced by 2015. more homeowners are up from underwater. new data reveals 200,000 borrowers are no longer underwater on their mortgages. more homeowners also moved from negative to positive equity on homes. however, 10.4 million homeowners still owe more than what their homes are worth. as further penance for its role in the financial crisis, citigroup is paying a $730-

million settlement. the deal still needs to be approved by a federal judge, and it is likely not the last of the bank's legal or monetray settlements. at the end of last year, citi estimated it would spend about $5 billion in future legal expenses. the senate banking committee is approving two of president obama's appointments. this week the committee voted unanimously to approve mary jo white as head of the sec. she is expected to be approved by the full senate later this week. meanwhile, the committee voted 12-to-10 on the nomination of consumer financial protection bureau head richard cordray. republicans may vote in order to block the nomination. some lawmakers have aruged they want more than one head to the bureau. the eyes of the sec and department of justice are on microsoft. according to the wall street journal, the probe involves microsoft's relationship with firms accused of bribing foreign officials in china, italy and romania. microsoft is not accused of any

wrong doing. however, the sec is charging investment manager craig berkman with promising investors he had special access to pre-ipo stock in facebook, linkedin, zynga and groupon. berkman is accused of using their money to pay off earlier investors, similar to a ponzi scheme. ryan air ceo michael o'leary gives a colorful description of boeing's dreamliner safety concerns. reducing the issues with the new jet's lithium ion batteries to "regulatory crap," the outspoken o'leary calls the scrutiny of boeing "unfair commentary." the budget carrier is understandably pro-boeing, as it handed the plane-maker an order yesterday for 175 jets worth $16 billion. the affymax drug company in palo alto, california needs a quick remedy. the stock is down more than 85%, trading around $1. also, 75% of the staff is gone after the only drug it has on the market was recalled. concerns about the anemia drug omontys include the possiblity of death in patients. affymax hopes to rectify the causes of

the safety concerns. a "mini" launch is taking place at the chicago board options exchange. as of this week, traders can buy "mini" options. the options are "small versions" of large, high-priced companies such as google and apple. investors only buy 10 shares as opposed to the hundred or more tied to the typical options contract. alan knuckman of option shop says this could help more retail investors get into the market. "i don't think all options are going to be in this mini format, but i think for a lot of expensive options, anything that trades over $150, it might make sense to roll these out. that could help increase the volume, and when you get more volume, that's better for everybody because that means it's easier to get in and easier to get out." mini options in apple, google, amazon, the s&p 500, and gld opened for trading this week. lulu-lemon acknowledges there

isn't a market for transparent pants. the upscale yoga apparel retailer is pulling some of its pants off store shelves because of a supplier mistake making the pants too see-through. shares tanked nearly $2. still to come, find out which struggling retailer could soon surprise investors. that'sknow n their own. that's next.

you want to be successful in business? okay, here's what you do: you look for guidance from people who've been there, who've been successful before you. here is bill mcbean. he is one who has done that. he's bought several small businesses and turned them into profitable performers, and he's written about it. the book is called "facts of business life: what every successful business owner knows that you don't." it has been praised by people like steve forbes and the coo of auto nation. all right bill, it's a matter of, you say, internal and external things. let's begin with some of the internal points. > > when you think about the internal, you've got to think of leadership right away. the

owner's leadership job is to make the environment possible for success for his employees. in other words, if he is making goals or making objectives, he or she has really got to make sure they have the tools and the training to make those goals achievable. the other thing that is important in this is that processes operate the business, and it's the people who operate the processes. and why that is important is because over time - six months, a year - the market changes, your customer demands change, your business changes; and you have to have processes and procedures that keep up with that change, so they have to be constantly updated, worked on, and reviewed. > another key point you talk about is keeping the motivation level high for your employees. let's talk about some of the external things that you're talking about. > > i think the external side really comes down to product and marketing. the first thing, you are your product, and you have to make sure that not only is it attractive and priced competitively, it is exactly what the customers want. and

once you have that, the key then becomes "how do i increase the strength of that product?" for example, if you are doing invoicing for customers, maybe you want to do the collecting. in other words, find something that matches or can be molded on with your main product to give your product a little bit more oomph and yourself a little bit more profitability. > success takes work, doesn't it? > > it takes work every day - it takes the planning, it takes the execution of it, the implementation, and maybe the hardest, watching what happens and making corrections, when things go right and when things go wrong. > bill mcbean. thank you so much. > > thank you very much. thank you bill. still ahead, spring forward: the tactics retailers are using to get you shopping this spring. that's next.

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a retail revolution is happening. retail specialist jim dion of dionco inc. is on set with us this morning. good to have you in the house today. > > thank you. > let's start by talking about some of the extremes that retailers are going to. they are always trying to attract shoppers. what are you seeing out there jim? > > we are seeing the most amazing trend is the online is going off-line, and they are actually opening brick-and- mortar locations to get customers to come in, try out a

product, and then go back online to purchase the product. > one of those examples is happening in the men's sector with stores you go into, you try clothes on, but you don't actually buy the merchandise there. > > correct. they will not sell it to you. they just have a product for you to try on, and you can try it on, and then they will take you online, you buy it, and it will be at your home in two days. > what about fast fashion? this is a big time for inexpensive, trendy clothes... one-season- only... > > interestingly enough, the leader in that, used to be the leader, was h&m, the swedish company. > absolutely. > > they are now facing some stiff headwinds and some real problems. their same-store sales are actually down, because they have not been as fast in their supply chain. their supply chain is actually a little slow. so companies like zara, which is really fast fashion, zara manufactures a lot of their product in europe, and they are

able to get it from the runway into the stores in, sometimes, four or five weeks. yes, their price points are a little higher than h&m, but they are doing much, much better. > zara has been a surprise. what other retailers out there might surprise even investors? > > personally, i think best buy. not a fashion retailer, but a retailer that i think was really underestimated, and everybody was writing their death notices. point of fact, they have come out strong against showrooming, they are matching prices in-store, they are actually retaining customers, they are putting a new emphasis on appliances. we haven't seen the profit numbers yet, but i think they are going to surprise people. > a comeback kid. unbelievable. and what do you make of some of the retailers that are saying "we are getting hit hard because of the payroll tax extension not happening." others are saying that shoppers are unfazed. what do you think is really going on out there? what is the real deal? > > i think that they are just not executing properly. the american consumer, i always say, you can't beat them with a stick. they keep coming back. we have had a very challenging winter, we have had very challenging whether, we have

had the payroll tax increase, we have had gas prices high. all of those things, and still, january, february, we had good retail sales. now in march, with this cold snap, it is not good for spring clothing, but the consumer appears to be out there and optimistic. > good to have you on the show. we will be watching best buy. that could be a surprise. thanks jim. > > thank you. coming up, the reason why big- time investors want to own a chunk of the u.s. dollar. chart talk is next.

we are doing a little currency chat this morning with tim mulholland of china america capital. good morning to you tim. > > good morning angela. > i am noticing that big institutional players are very focused on buying the dollar index right now. what is that all about? > > the dollar trend turned, and that's with the euro. the euro peaked about a month or so

ago, and now the euro has been on a decline, the dollar a rally. and the primary driver of the dollar index is the euro - it's the heaviest weighting. but i think also the dollar index could provide perhaps a lower volatility than say an outright position in the euro or another currency to play a strengthening dollar. so i think that is what's the driving force behind it. > is this something smaller investors should be doing, or should they stay away? > > i think it is a way to do it. again, it is probably a lower-volatility way than an outright physician. i also think that there's etfs, there are obviously futures, there are obviously options on futures as well, and different ways to participate. but i think it is certainly something, if someone has a view on the dollar, they could take a look at, sure. > so they can take smaller bites. what about treasury secretary jack lew's trip to china? what do you expect will come out of that? what are you watching for as a trader? > > it is a nice visit, but i

think that is very basic what is, an introduction visit, and i don't think there is anything whatsoever that is going to come out of it. as a matter of fact, the chinese, the pboc has actually lowered the reference rate for the rmb, or yuan. that is mainly due to the fact that the yuan has depreciated verses the dollar over 20% since several months ago. so that basically makes china's exports a little less competitive. so i think that is the driving force behind what they're doing, but it is probably counter to what mr. lew wants them to do. so, to answer your question, i don't think his visit is anything more than a cordial hello, but it will have zero effect on any policy changes now. > thanks for those insights. that is tim mulholland of china america capital. stick around for tomorrow's show. it's a movies and money day with our critic talking about the wild success of "oz, the great and powerful," and what it means for disney stock. before we take off today, a special shout-out this morning to our firends watching us on ktvk channel 3. it's great to be back in phoenix! from all of us at first business, have a wonderful day!